Financial Services Guide - Part 1
Version 1.1, 28 November 2011
A guide to our relationship with you and others
Our Financial Services Guide (FSG) provides you with important information about Merit Wealth Pty Ltd (‘Merit
Wealth’ or ‘Licensee’) and Advisers who are authorised representatives of Merit Wealth and will provide you
with the financial services described in this FSG.
This FSG is designed to help you evaluate and make an informed decision about our financial services. We
suggest you retain this FSG for your future reference.
This FSG consists of two separate documents. This document is Part 1 and contains important information
about:
Merit Wealth and its advisers who will provide the services offered in this FSG as Authorised Representatives of
Merit Wealth. See Part 2 of the FSG for details of the Authorised Representatives. (The Authorised
Representatives detailed in this FSG will be collectively referred to as ‘us’, ‘we’, ‘our’ and ‘Authorised
Representatives’ throughout this FSG)
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Merit Wealth as the holder of an Australian Financial Services License
The process we follow to provide financial advice
How we and our associates are paid
Any arrangements which may influence our advice to you
How we protect your privacy
Who you should contact if you have a complaint.
FSG Part 2 is a separate document and provides a profile of the Merit Wealth Adviser who is authorised by
Merit Wealth to provide you with the financial services described in this FSG on behalf of Merit Wealth.
Information contained in this FSG may be updated from time to time without the need to notify you, provided the
updated information is not materially adverse to you.
What other information should you consider before deciding whether to proceed with our recommendations?
If we give you personal financial product advice you will receive a Statement of Advice (SOA), or in specific
circumstances a Statement of Additional Advice (SOAA) or a Record of Advice (ROA) that confirms the
discussions you have had with us, the recommendations we are making and the basis for those
recommendations. These various documents will also explain how those recommendations will work
towards achieving your goals, any fees received by us and any associations with financial product providers.
When a financial product is recommended to you, you will be provided with a Product Disclosure Statement
(PDS) or other disclosure document issued by the product provider. The PDS contains information about the
risks, benefits, features and fees payable in respect of the product.
In combination, these documents will help you make an informed decision about whether to proceed with
our recommendations.
Respect • Protect • Reward
Merit Wealth Pty Limited ABN 89 125 557 002 operates under Australian Financial Services Licence No.409 361
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Who provides the financial services described in the FSG?
The financial services offered in this FSG are provided by Merit Wealth Advisers who are Authorised
Representatives of Merit Wealth.
Part 2 of the FSG contains details of your Adviser, their experience, qualifications and professional
memberships.
Who is responsible for the service?
In relation to the services offered in this FSG, Merit Wealth, as the holder of an Australian Financial Services
License, does not act on behalf of any other person or licensee. Merit Wealth is responsible for the services
offered in the FSG. Merit Wealth has approved this FSG.
Merit Wealth holds a Professional Indemnity Insurance Policy, which complies with the requirements for
compensation arrangements under the Corporations Act. (Subject to its terms and conditions) this Policy
covers claims relating to the professional services provided by Merit Wealth and its representatives.
It will cover claims in relation to professional services provided by representatives of Merit Wealth while
authorised by us, even where that representative has subsequently ceased to be an authorised representative
of Merit Wealth.
What Financial Services do we offer?
We are authorised to deal in the following kinds of financial products (unless otherwise provided in Part 2 of this
FSG):
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Managed investments
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Superannuation
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Retirement income streams
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Deposit taking facilities
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Margin lending
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Life and disability income insurance
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Portfolio administration services
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Retirement savings accounts
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Securities and derivatives
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Government debentures, stocks and bonds.
What Products are Available?
A wide range of financial products by many leading financial product providers are available. Details of the
available products are contained in the Merit Wealth Approved Product List, which is available on request. All
products on the Approved Product List are thoroughly researched by Merit Wealth.
We are only authorised to advise you in relation to products on that list and we will only recommend a product to
you after considering its suitability to your individual objectives, financial situation and needs.
How do we ensure the advice we give you is suitable to your needs and objectives?
To ensure that we provide advice that is suitable to your needs and financial circumstances we need to
understand your financial situation, personal and financial objectives and your needs. To ensure that we provide
you with suitable advice we will follow a step-by-step process as outlined below:
We will meet with you for an initial consultation. During this meeting we will discuss your expectations and provide
you with details of the services that we can offer.
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We will collect all the information that we need from you, including your personal financial situation, your
needs, personal and financial objectives. If you do not wish to give us the information we require we will
warn you about the possible consequences of us not having your full personal information and the impact
on our recommendations. You should read these warnings carefully.
We will help you identify your goals and discuss your attitude towards investment risk.
We will consider strategies and areas such as income requirements, taxation, social security, cash
requirements and estate planning requirements. Based on these considerations and others, we will
prepare and present you with a written Statement of Advice or in some cases depending on the
circumstances a Statement of Additional Advice, or Record of Advice.
Respect • Protect • Reward
Merit Wealth Pty Limited ABN 89 125 557 002 operates under Australian Financial Services Licence No.409 361
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We will discuss our recommendations with you, make any changes you require and gain your agreement
to implement those recommendations.
We will then implement those recommendations.
We will periodically meet with you to review your financial circumstances if you agree to an ongoing
service arrangement.
We will also explain to you any significant risks of the financial products and
Strategies which we recommend to you. If you are unclear of the risks, do not hesitate to question us
further.
What documents do you receive if we provide further advice?
Where a further review is conducted and personal advice is provided, in some circumstances we are not
required to provide you with a Statement of Advice, or a Statement of Additional Advice for this further advice.
Where this is the case, if you have not already been provided with a Record of Advice (ROA), you may request
a copy of the ROA from us for a period of seven years from when the further advice was first provided to you. In
all other circumstances we will provide you with a Statement of Advice.
How are we paid for our services?
We and Merit Wealth receive:
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Fees paid by clients
Commissions paid by some product providers, including life insurance products
Other payments by product providers
Other benefits.
All fees and commissions are payable to Merit Wealth. Merit Wealth may receive up to 100% of any fees and
commissions and may pass on to your Adviser up to 100% of these fees and commissions.
Details of any fees, commissions or other benefits that we are entitled to receive in relation to a specific financial
product recommendation will be disclosed to you.
This disclosure will be in dollar terms, or where this is not possible, in percentage terms and will be disclosed to
you in your Statement of Advice, Statement of Additional Advice or Record of Advice.
The types of fees, commissions and other benefits that may be received by us and by Merit Wealth are
described below.
What type of fees, commissions, payments and other benefits do we receive for our services?
Service fees
We will discuss and agree our fee structure with you before we provide you with services. The types of fees you
can be charged are listed below. You may be charged a combination or part of any of these fees.
Fees for advice
We may charge fees for the preparation, presentation and implementation of our advice. These fees will be
based on your individual circumstances, the complexity involved in your situation and the time it takes to
prepare personal financial advice for you. We will discuss these fees with you and gain your agreement on the
fees before we provide you with advice.
Ongoing advice fees
We may charge a fee to provide ongoing portfolio reviews, ongoing advice suitable to your needs and/or the
provision of ongoing services. This fee will be agreed with you and is either a set amount or an amount based
on the amount of funds under our advice and/or the time involved in reviewing your portfolio and circumstances.
Payment methods
Our fees are either invoiced to you directly, or deducted from your investments, or a combination of these
methods. Where it is debited from your investments it is normally referred to as the Adviser Service Fee.
In most instances you will be able to select the method of payment that suits you best. We will discuss and
agree the method of payment with you before we provide you with services.
Respect • Protect • Reward
Merit Wealth Pty Limited ABN 89 125 557 002 operates under Australian Financial Services Licence No.409 361
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Further information about these fees and methods of payments will be provided in your Statement of Advice,
Statement of Additional Advice or Record of Advice where further advice is provided.
Commissions
If you take out a financial product through us, Merit Wealth may receive payments in the form of initial
commissions and/or ongoing commissions from the financial product providers. These commissions are included
in the fees, premiums and interest rates (in the case of margin loans) you pay for the product. You do not pay
these fees to us directly. We may agree to rebate some or all of these.
The commission payable for different classes of financial products is listed below.
Investment Products
For investment products, including superannuation and annuities, commissions are generally deducted from the
funds you invest. Merit Wealth may receive between 0% and 5% (including GST) of your initial investment as
initial commissions from product providers whose products are recommended to you. Merit Wealth may also
receive ongoing commissions from the management fees of the product providers. Ongoing commissions range
between 0% and 2% pa (including GST) of your investment balance.
Example of Investment Product
Your Adviser recommends that you invest $10,000 in an investment product. The
applicable initial commission is 5% (including GST) and ongoing fees are 1% pa (including
GST). Merit Wealth will receive initial commission of $500 and may pass up to $500 of that
to your Adviser. Assuming the investment amount stays the same, each year Merit Wealth
will receive ongoing commission of $100 and may pass up to $100 to your Adviser.
Life Insurance Products
Depending on the product you purchase, Merit Wealth may receive between 0% and 140% (including GST) of the
annual premium as initial commission and between 0% and 38.5% pa (including GST) of the annual premium for
ongoing (trail) commission. Merit Wealth may pass up to 100% of those commissions to your Adviser.
Example Life Insurance
Your Adviser recommends an insurance product to you. The annual premium is $450 pa.
Merit Wealth may receive up to $630 as an initial payment and may pass $630 to your
Adviser. Assuming the premium stays the same, each year; Merit Wealth may receive up
to $173.25 as an ongoing (trail) commission and may pass up to $173.25 to your Adviser.
Margin Lending Products
If your adviser organises a margin loan for you, Merit Wealth may receive payments in the form of ongoing
commissions from the margin loan provider. These commissions range between 0% and 0.5% of your loan
balance. These commissions are included in the interest rate that you pay for the loan. You do not pay these fees
to us. Merit Wealth may pass up to 100% of these commissions to us.
Example Margin Lending Products
Your Adviser recommends you borrow $10,000 through a margin loan. The applicable
ongoing commission is 0.5% pa. Assuming the loan balance stays the same, each year
Merit Wealth will receive ongoing commission of $50 per annum and may pass up to $50
per annum to us.
Other Product Provider Payments
Wrap and other Portfolio Administration Services
If your Adviser recommends that you invest via the Merit Wraps and/or another approved portfolio administration
service and you accept that recommendation:
The provider of the service will pay Merit Wealth up to 65% of the account keeping fee you pay to the portfolio
administration service. Your Adviser does not receive any part of this payment.
Respect • Protect • Reward
Merit Wealth Pty Limited ABN 89 125 557 002 operates under Australian Financial Services Licence No.409 361
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Example
Your Adviser recommends a portfolio administration service to you and you accept that
advice and pay an account keeping fee to the service provider of $100 pa. Of that fee, the
service provider will pay Merit Wealth of up to $65. Your Adviser does not receive any part
of this payment.
Where your Adviser recommends you invest through Merit Wraps, certain investment funds (known as the
‘Advantage Investment Series’) may qualify for a Fund Manager Payment. The total Fund Manager Payment is
up to 41% of the Management Expense Ratio applicable to the relevant funds, multiplied by the amount you
have invested in those funds. The Fund Manager Payment is calculated monthly on the average opening and
closing balances in the Advantage Investment Series funds, held by you. Your Adviser can tell you which funds
qualify for the Fund Manager Payment.
A portion of the Fund Manager Payment is rebated to you and a portion is retained as commission by Merit
Wealth and by the platform provider of the Wrap Products. You will receive a monthly rebate of up to 0.0084%
of the average balance you have invested in the Advantage Investment Series for the month. Your rebate will be
paid monthly into your Cash Account, identified as the ‘Wrap Advantage fee rebate’.
Merit Wealth will receive a monthly commission of up to 0.014% of the average balance you have invested in
the Advantage Investment Series for the month. BT Portfolio Services Limited will receive a monthly
commission of the balance of the total Fund Manager Payment. Merit Wealth and your Adviser do not receive
any part of this commission.
Example
Where the average balance you have invested in the Advantage Investment Series via a
Wrap Product is $100,000, you will receive a monthly rebate of up to $8.40 and Merit
Wealth will receive a monthly commission of up to $14.00
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When you invest via BT Elect Portfolio, the service provider will pay Merit Wealth a commission of up to
0.25% pa of the sum invested, payable out of the Management Fee that you pay to the service provider
in relation to your investments as detailed in the relevant PDS. Merit Wealth and your Adviser do not
receive any part of this payment.
Example
For an average investment balance of $100,000 held in the BT Elect Portfolio, Merit
Wealth will receive a commission of up to $250 pa.
Other benefits
From time to time we may accept alternative forms of remuneration from product providers, such as hospitality
or support connected with our professional development (egg training or sponsorship to attend conferences).
We maintain a register detailing any benefit that we receive which is valued at more than $300.
A copy of the register is available on request.
Any benefits that we receive that are relevant to your consideration of our advice to you will be disclosed in the
Statement of Advice, Statement of Additional Advice and Record of Advice if such document is requested. Other
than as set out above, we have a policy of not accepting alternative forms of remuneration from product
providers, which are worth more than $300 or which are related to the volume of business we place with a
particular product provider.
Respect • Protect • Reward
Merit Wealth Pty Limited ABN 89 125 557 002 operates under Australian Financial Services Licence No.409 361
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What arrangements may influence our advice to you?
Merit Wealth has an arrangement with BT Financial Group to provide an Administration service for portfolios of
investments held in Superannuation and Non Superannuation. (‘Wrap' or 'platforms'). Where it is suited to your
circumstances, your adviser may recommend your investments be administered through one of these platform
products. Your adviser does not receive any financial benefit for doing so; however Merit Wealth receives a
portion of client administration fees in the platforms.
Merit Wealth has no financial interest in any other products recommended to you.
What fees do we pay to someone that refers you to us?
If a client is referred to us we may pay the referrer a fee. We may also provide the referrer with gifts such as
branded promotional items, hampers, gift vouchers etc. The fee varies according to the client, referrer and
financial products involved. The fee may be a percentage of our fees, a percentage of the total amount invested
paid through the referral, or a flat fee.
We may pay these fees upfront when the financial service is provided or the financial product is provided or
periodically as ongoing fees. The details of that fee will be in the Statement of Advice, Statement of Additional
Advice or Record of Advice, if a Record of Advice is requested.
How do we protect your Privacy?
We maintain a record of your personal information which includes details of your investment objectives, financial
situation and needs. We also maintain copies of any recommendations that we have made to you.
The Merit Wealth Privacy Policy details how we collect, use and protect your personal information. Please ask
us if you would like a copy of the Merit Wealth Privacy Policy or you can view a copy on Merit Wealth’s website.
If you would like to view your file at any time, please ask us and we will arrange for you to do so.
Merit Wealth is required, pursuant to the Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF)
Act and its corresponding rules and regulations to implement certain customer identification processes. We may
be required to obtain information about you at the time of providing financial services to you and from time to
time thereafter in order to meet our legal obligations. We have certain reporting obligations pursuant to the
AML/CTF Act and information obtained from or about you may be provided to external third parties and
regulators in accordance with the requirements imposed on us.
How can you instruct us?
You may specify how you would like to give us instructions, for example, by phone, fax or email. Alternatively,
you may provide instructions to us in person. Where instructions are provided by telephone, these must be
confirmed in writing.
Respect • Protect • Reward
Merit Wealth Pty Limited ABN 89 125 557 002 operates under Australian Financial Services Licence No.409 361
Page 6 of 7
Who should you contact if you have a Complaint?
If you have any complaint about the service provided to you, we recommend you take the following steps.
a)
Contact Merit Wealth or your Adviser about your complaint.
b)
If your complaint is not satisfactorily resolved by your Adviser within 3 business days, please contact
Merit Wealth on 1300 785 611 or put your complaint in writing and send to:
Chief Executive Officer
Merit Wealth Group Pty Ltd
Level 2, 115 Pitt Street, Sydney, NSW 2001
Or email your complaint to contactus@meritwealth.com.au
If your complaint remains unresolved, or you remain dissatisfied with the decision, you can contact the
Financial Ombudsman Service (FOS). FOS independently and impartially resolves disputes between
consumers, including some small businesses, and participating financial services providers.
FOS independent dispute resolution processes cover complaints about financial services including banking,
credit, loans, general insurance, life insurance, financial planning, investments, stock broking, managed funds
and pooled superannuation trusts.
You can contact FOS on:
Telephone 1300 780 808
Fax + 61 3 9613 6399
Email info@fos.org.au, or in writing to GPO Box 3, Melbourne VIC 300. Please quote our membership number
27958.
The Superannuation Complaints Tribunal (SCT) also deals with complaints about superannuation funds,
annuities and deferred annuities and retirement savings accounts.
You can contact the SCT on:
Telephone 1300 884 114
Fax +61 3 8635 5588
Email info@sct.gov.au, or in writing to Locked Bag 3060 GPO Melbourne VIC 3001
If your concerns involve ethical conduct you may wish to consider raising your concerns in writing with the
Financial Planning Association of Australia (FPA). They can be contacted at:
Financial Planning Association of Australia
PO Box 109, Collins Street
West Melbourne VIC 8007
The Australian Securities and Investments Commission also has a free call Info line on 1300 300 630. You can
call this number to make a complaint and to obtain further information about your rights.
Respect • Protect • Reward
Merit Wealth Pty Limited ABN 89 125 557 002 operates under Australian Financial Services Licence No.409 361
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